Suzy Davies, WTA Chair gave evidence to the initial meeting of the UK Covid-19 Inquiry themed around Travel and Tourism. This was an opportunity to help shape the work of the Inquiry by providing feedback on the draft Terms of Reference. The WTA attended the meeting alongside other industry  organisations from around the UK. A transcript of our meeting will be published on our website at the end of the consultation period. 

The Inquiry website has more information about the Inquiry and the public consultation is now open. Please share the link to the consultation with others: https://ukcovid19inquiry.citizenspace.com/contribute/terms-of-reference-consultation/ 
  
If you have any questions, please contact the Covid-19 Inquiry Set Up Team:
 
Email: contact@covid19.public-inquiry.uk
Website: https://covid19.public-inquiry.uk

To help us lobby the Welsh Government to reduce the 182 day threshold we needed as much data as possible.
Thank-you to all those of you who completed this survey.
The full body of evidence is now available on our WTA Consultations page which has now been submitted to the Welsh Government. 

​https://www.wta.org.uk/consultation.html

​Response to Letter sent by WTA 8th March regarding the Retail, Hospitality and Leisure Rates Relief scheme.
 
In 2022-23, the Welsh Government will provide £116m of targeted non-domestic rates support to businesses in the retail, leisure and hospitality sectors. Ratepayers will be eligible for 50% off their liability for the financial year. The amount of relief under the Welsh Government’s Retail, Leisure and Hospitality Rates Relief (RLHRR) scheme will be capped at £110,000 per business across Wales. Our approach means that businesses in Wales will receive comparable support to that provided in other parts of the UK.
 
To ensure businesses in Wales are sufficiently supported, and reflecting the nature of our tax base, we have invested an additional £20 million on top of the consequential funding received from the UK Government. This is in addition to our permanent relief schemes that provide over £240m of relief every year.
 
Full guidance on the scheme is published on Business Wales webpages and as in previous years, the scheme will be administered by local government.  The Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 will be application based, designed in a manner such that local authorities are able to ensure the £110,000 cap is accurately enforced across Wales.  The scheme guidance and timescales for administration has been developed in conjunction with local authorities.  Businesses that have been able to continue trading at a substantial level, such as food retailers, may opt not to apply for the relief despite being eligible.
 
The scheme applies to rates liability from 1 April to 31 March for the relevant tax year. Any queries about eligibility for relief and the application process should be directed to the relevant local authority.  The Retail, Leisure and Hospitality Rates Relief scheme for 2022-23 will operate on a similar basis to how it has done in 2020-21 and 2021-22, using discretionary powers under section 47 of the Local Government Finance Act 1988, as such no legislation will be in place governing the specific operation of the scheme.
 
 
 

An appeal to the industry: 
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I'm sure we are utterly appalled at what is happening in Ukraine.  We all feel for those women, children and elderly people who have fled, leaving their fathers, brothers and sons to fight an unjust war. Countries across the world have started to offer sanctuary to Ukrainian refugees, including the UK and, specifically, Wales.
 
I know we may not feel particularly well-disposed towards Welsh Government at the moment, but they have asked for our help.  They are drawing up plans as speedily as possible to find suitable temporary accommodation for refugees who have been forced to abandon their homeland.
 
As we approach high season, many of your businesses will not have spare capacity anyway.  However, if you think you might be able to help at least in-principle at this stage, even for a short period, please let us know.  Although there are no details as yet, there will be a financial package offered to anyone who is a position to offer accommodation.
 
The refugees are mainly women, their children and their elderly relatives.  So that they are not isolated or separated, Welsh Government is looking for hotels, B&Bs and larger self-catering properties, including static parks or clusters of self-catering properties perhaps in the same village.  You can understand why these desperate people will start to recover better if they know there are other Ukrainians nearby.
 
Time is short and so I would be very grateful if you could give this some urgent thought, consult your own members and come back to me (suzy.davies.private@gmail.com) this week.  
 
This is about offering a hand to people who need our help.  If we can respond positively, it also underlines how important the holiday accommodation sector is to Wales's reputation not just its economy and national wellbeing.  I'm sure we will all make sure they remember that when it comes to other discussions with them.
 
I look forward to hearing from you in the next few days.
 
Best Wishes
 
Suzy
 
Suzy Davies
Chair – Wales Tourism Alliance

ALVA’s latest sentiment tracker survey the key findings are:

•   There are now only small minorities – around 10% for indoor attractions - whose anxiety is strong enough to prevent them from visiting an attraction, which represents a very strong shift in positivity since summer 2021. There is now an overriding sense that the time has come to return to visiting attractions
•  However, ongoing visit nervousness is still apparent, with around 40% still expressing concerns about visiting attractions – mainly centring upon a continued anxiety about crowds
•    Many caveat a desire to return with a need (and sometimes, expectation) for some safety measures to be retained. Indeed, there remains over 40% of the market who disagree that all Covid-19 safety measures should be removed
•   There is a growing proportion of the audience who are pushing back against some of the more onerous measures – pre-booking, mask wearing and proof of vaccination status - to the extent that they are a visit barrier
•    General encouragement of pre-booking or perhaps compulsory pre-booking during busy periods now appears a more sustainable strategy than blanket compulsory pre-booking
•   It feels like the market still needs the ‘safety blanket’ of some overt Covid measures, even if these are primarily signals to demonstrate that an attraction has the best interests of its visitors at heart, and messaging around respecting fellow visitors
•  In deciding upon measures to retain and remove, we perhaps now need to change the question from ‘which measures keep our visitors safest?’ to ‘which measures least impact upon the experience?’

Open letter sent to Mrs Julie James M.S - Minister for Climate Change
  
Dear Minister,

Technical Consultation on the draft Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022

Please accept this open letter as an expression of our dismay at the contents of the draft order.  While we have views on the level of council tax proposed, it is the threshold for distinguishing between a second home/casual let and a self-catering business (FHL) which is the subject matter of this letter.

Your announcement of 2nd March 2022 came as a complete shock to the tourism industry, most particularly bona fide FHLs.  Key representatives had responded in good faith to the consultation on second homes, as keen to distinguish between FHLs and second homes/casual lets as the Welsh Government is.

In fact, FHLs had, themselves, offered the position that the current threshold is not sufficiently ambitious to create the distinction. The Wales Tourism Alliance had suggested that the NDBR thresholds be raised to parity with the HMRC’s availability condition of at least 210 days in the year (already an increase from the 140 days prior to 2012) and occupancy as a commercial, furnished holiday accommodation for at least 105 days in the year.  This represents a 50% increase in both criteria, and is readily understood by FHLs, familiar with HMRC, making introduction less confusing.

The draft order raises both those criteria dramatically: the number of days the property must be available rises from 140 to 252 days, an 80% increase, and the number of days a property must be let rises from 70 to 182 days, a rise of over 150%.  There is no explanation as to why these figures have been chosen.

Responses to Q9 in your own consultation are clear that this is not the majority position. That is despite the fact that many respondents were strongly anti-second homes and who, perhaps, did not distinguish between FHLs and domestic properties.  Of the 155 responses suggesting a rise on the availability criterion, 149 proposed thresholds higher than the current 140 days, ranging from 150 to 365 days. The most common specific suggestion was 210 days a year. The most common specific suggestion for commercial occupancy was 105 days, with others ranging between 182 days or 6 months (9 responses).
While we understand that you wish to take firm action on second homes and those who game the local tax system, these proposed changes show no understanding of how FHLs operate and how they deal with inconsistency of demand.

FHLs would be delighted to be able to guarantee 182 days of occupancy.  Some, perhaps, can in areas of exceptionally high demand.  They are not typical of the sector. However, the thresholds you propose affect all Wales and are not discretionary (unlike the council tax premium on second homes).  We want FHLs to pull out all the stops, but this occupancy threshold will be out of reach for too many, regardless of how hard they try, yet their contribution to their local economy and jobs market remains invaluable.

Demand is down to the customer and the seasons.  Even 52 long weekends would not reach the proposed occupancy threshold and it is a rare FHL that secures 52 long weekends.  It would be extremely ambitious to think that the rest could be made up by weekly bookings in high season, especially in parts of Wales where under-tourism is the issue.

We urge you to reconsider these thresholds, particularly the occupancy threshold.  Even the most vigorous marketing of quality FHL accommodation cannot guarantee the equivalent of six months of end-to-end bookings.  It would be erroneous to make any assumptions based on the pandemic period as this cannot be seen as indicative of future demand patterns.

Furthermore, these proposals have been prepared on the assumption that all properties, whether FHLs or casual lets, would be suitable as homes.  FHLs have to comply with industry standards (unlike casual lets) but this is not the same as for domestic residential lets:

1. Many FHLs are single units owned by families within the curtilage of their own homes.  They will be paying business rates on that unit and, even if eligible for the small business exemption, will be paying premium business costs for council services such as waste collection. If they cannot meet the new occupancy thresholds, these micro businesses would be unviable at the new council tax rates.  They would then lose a substantial part of the family income (taxed), but without releasing a property into the residential housing market.
   
2. Many self-catering units have planning permission to operate solely as commercial units, e.g., farm diversification, and fall outside the council tax regime altogether. If providers fail to meet the occupancy threshold, they cannot simply be transferred into domestic property taxation.
3. Many properties are not in villages but in locations where they are of no interest and often in too poor a condition - to be attractive to local residents

Conversely, the new proposal would effectively:

• Discourage businesses who cannot meet the occupancy threshold consistently and shut out new entrants to the self-catering industry in those parts of Wales where there is under-tourism and no threat to community identity or cohesion (see the Brooks report).  This would no longer be a viable option for rural business diversification.
• Discourage the bringing back into use of empty properties, especially those where mortgage valuations are low compared to asking price, and where renovation/maintenance costs are too high in comparison to the size and value of the property.  We suggest that the NDR threshold and council tax proposals will both stifle investment in older properties, undermining the purpose for which these changes have been proposed.
• England, our nearest competitor and source of most overnight visitors to Wales, has recently adopted an occupancy threshold in line with Wales current threshold of 70 days. Wales self-catering businesses would be placed at a distinct commercial disadvantage to English businesses, particularly those on the eastern border of the country where under-tourism is an issue and where the Brooks report pointed to there being no second homes issue.

Finally, we understand that your department is focused on addressing the second homes issue which undoubtedly faces some communities in Wales.  However, Welsh Government also has its responsibilities to the Welsh economy.  Tourism is a major industry in Wales.  We imagine these proposals will be a concern to the Minister of a different department in the absence of modelling or economic impact assessment.

We are not aware, either, of any modelling on how this will affect the tax take from the tourism industry, a matter of some interest to another Minister.  Tourism businesses have made it clear they do not support the gaming of the local tax system and understand their role in contributing through fair taxation. These thresholds deny them the opportunity to pay fair local business tax. The tourism industry has found itself in a very unstable position because of Covid, recognised by the fact it had additional Welsh Government assistance during lockdown. The effects will not disappear overnight and it is very difficult to extrapolate anything from the figures for 2020 - 2022 in order to have a clear picture of the future.

What is clear, though, is that - on top of other pressures recorded elsewhere - the cost-of-living rises will affect businesses and, just as importantly, those who would like to holiday in Wales; a good quarter of them are from Wales itself.  Welsh Government’s own research points to the family budget being the main predictor of holiday choices. The industry is facing a growing trend of last-minute booking and, now, fierce competition from the lower price-point overseas holiday market.

Wales tourism is more than its coastal hotspots.  It has been caught up in attempts to mitigate lack of investment in housing supply and local authority budgets at a time when it is trying to find some equilibrium, retain its good reputation, provide jobs and contribute to the country’s coffers.
 
Please don’t throw the baby out with the bathwater.
 
Yours sincerely,

Suzy Davies

Chair – Wales Tourism Alliance
 
c.c. Vaughan Gething M.S. – Minister for the Economy & Transport of Wales

c.c. Rebecca Evans M.S. - Minister for Finance & Local Government

The Welsh Government has announced potential new measures to address the issue of second home owners pricing locals out of the housing market in  popular tourism destinations.  

The first measure is to allow local councils to set council tax premiums of up to 300% on second homes and long-term empty properties from April 2023 (the current allowed premium is 100%). Individual councils will be allowed to determine whether they apply a premium, the level of the premium (up to the 300% maximum) and whether different premiums should be set for second homes and vacant homes.
 
The second measure, which is more important for the tourism industry is the announcement that the criteria for self-catering accommodation being eligible for business rates instead of council tax will also change from next April. The current requirement is for properties to be available to let for at least 140 days a year and let for at least 70 days a year in order to be eligible for business rates. From next April this will increase significantly to having to be available to rent for at least 252 days and actually let for at least 182 days in any 12-month period.
 
The Wales Tourism Alliance is extremely concerned about this proposed second measure and will be responding to the consultation. These proposals will be significantly greater than the requirement for self-catering operators in England (available for 140 days a rented for 70 days a year the current Wales level) and there are concerns that many self-catering businesses will be able to achieve these new thresholds.
 
https://gov.wales/new-tax-rules-second-homes
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The ONS has published new data on employment in the UK from 2014 to 2021. This includes a section on the accommodation and food services which highlights both the impact of Covid and Brexit on employment in the sector. Some of the key findings are:
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• 296,000 employees in the sector were EU nationals in July 2014. Up to June 2019, this increased by 105,000 to 401,000, a 35% increase
• 205,000 employees were non-EU nationals in July 2014. Up to June 2019, this increased by 17,000 to 223,000, an 8% increase
• Between June 2019 and June 2021, the number of EU nationals fell by 98,000 to 303,000, a 25% decrease. Comparatively, payrolled employments held by non-EU nationals remained close to the same level as in June 2019 at 222,000
• Between June 2019 and June 2021, accommodation and food services saw the largest decrease of employment of any sector. The total number of employees decreased by 124,000, largely due to a drop of 98,000 EU national employees.

 
https://www.gov.uk/government/statistics/payrolled-employments-in-the-uk-by-region-industry-and-nationality-from-july-2014-to-june-2021/payrolled-employments-in-the-uk-by-region-industry-and-nationality-from-july-2014-to-june-2021
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